American Airlines Drops Gogo Lawsuit

Feb 28, 2016

What:
American Airlines (AA) dismissed the lawsuit it filed earlier this month against Gogo, the world’s biggest in-flight Wi-Fi provider. The announcement follows a dispute that began when the airline attempted to cut ties with Gogo and switch to ViaSat, a rival service used by JetBlue, Virgin America and parts of United Airlines’ fleet. Now, Gogo is promising stronger, satellite-based Wi-Fi beginning in 2017.

Why It Matters:
The war for quality in-flight Wi-Fi wages on, and AA’s battle cry can be heard loud and clear. This public move by the airline continues to fuel a growing trend in aviation — an intensified focus on the passenger experience. Although AA dropped its lawsuit while Gogo was in the process of preparing a competing offer, Gogo has since responded by promising improved service by 2017. So, while this legal hiccup may not bode well for the future of this business relationship (one that is responsible for 15 percent of Gogo’s revenue), passengers can rejoice at the possibility of a stronger connection ahead.

Fast Facts:
- ViaSat first offered American Airlines (AA) “faster Wi-Fi for a lower cost” in early February.

- Under AA’s contract with Gogo, the airline may move to a competing service if it receives a better offer. Gogo then has the opportunity to submit an alternative proposal.

- AA filed suit Feb. 12, stating in the complaint that Gogo “is refusing to honor a 2012 agreement” by failing “to acknowledge or accept American’s notice letter under the agreement.”

- Gogo is the largest supplier of in-flight Wi-Fi, controlling about 80 percent of the market and serving passengers on more than 9,000 aircraft.

- The contract between AA and Gogo affects approximately 200 of AA’s older aircraft.

- Gogo is now promising to employ "High Throughput Satellite" by 2017, which the company says is superior to the “air-to-ground system” it currently uses.

- AA’s full complaint can be found here.

What They Are Saying:
“American has dismissed the lawsuit without prejudice. If Gogo chooses to submit a proposal in response to a competitive offering, we will evaluate it,” an American Airlines spokesperson told Fortune magazine.

"Gogo is all about bringing the best customer experience to our aviation partners; this deal will dramatically increase bandwidth and drive overall costs per bit down by orders of magnitude," said Anand Chari, Gogo's chief technology officer.